By David Winning


SYDNEY--Ramsay Health Care Ltd. reported a 39% fall in annual profit and signaled a gradual recovery in the 2023 fiscal year as the pandemic continues to drag on its performance.

Ramsay said its net profit totaled 274 million Australian dollars (US$189 million) for the 12 months through June, down from A$449.0 million a year earlier. Earnings before interest and tax--or Ebit--declined by 21% to A$891.3 million.

Ramsay, which has more than 500 hospitals and clinics in 11 countries, declared a final dividend of 48.5 Australian cents a share, bringing the annual payout to A$0.97 a share.

Ramsay played a key role in helping many countries navigate the pandemic by freeing up space in its private hospitals to look after patients with Covid-19. However, that assistance came at the cost of reduced surgical activity levels, especially during lockdowns such as those introduced in eastern Australia in the early months of fiscal 2022.

While pandemic restrictions have largely been rolled back in Australia and Europe, Ramsay's earnings recovery has been held back by sickness or isolation among its workforce. The company said Covid-19 has also upended clinician availability and raised operating costs.

"In the near term, the industry continues to be under pressure from a high level of Covid cases in the community combined with the highly restrictive guidelines around the patient pathway together with the resultant impact on the availability of the workforce, impeding a recovery in volumes and productivity," Ramsay said on Friday.

Ramsay said it expects a gradual recovery through fiscal 2023 and more normalized conditions from fiscal 2024 onwards.

In fiscal 2022, Ramsay's revenue from patients in the Asia-Pacific region, including Australia, fell by 1.8% to A$5.33 billion, while Ebit declined 27% to A$467.3 million. Ramsay estimated the total impact of Covid-related disruptions in Australia during fiscal 2022 at A$276 million.

In the U.K., Ramsay said it faced Covid-related cancellations at short notice, and inflationary pressures, including on pay. Ramsay estimated the additional costs of operating in a Covid environment in the U.K. during fiscal 2022 at A$56 million.

Still, Ramsay said its fiscal 2022 revenue from treating patients in the U.K. nearly doubled to A$1.2 billion.

Revenue from patients in continental Europe rose by 7% at constant-currency rates, although Ramsay has faced labor shortages in France that have driven up costs due to the increased use of agency staff.

In April, a KKR & Co. Inc.-led consortium offered to buy Ramsay for A$88.00 per share, raising the private-equity firm's bet on growing demand for healthcare. The approach led some analysts to speculate the bid could be blocked by Australia's foreign-investment watchdog, given Ramsay owns about 35% of the Australian hospital market.

After the market closed on Thursday, Ramsay said the consortium has confirmed the key terms of its proposal, including price, after the first phase of due diligence.

The consortium also proposed an alternative deal structure that would see Ramsay's Australia-listed shares fully acquired along with a 15% interest in Ramsay Santé, which is listed on the Euronext exchange and operates in Europe. Ramsay shareholders would receive the balance of the company's shareholding in Ramsay Santé, representing an approximately 37.8% interest, as part consideration.

Ramsay said Thursday that its board concluded the alternative proposal is "meaningfully inferior" to the A$88.00-a-share cash offer.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

08-25-22 1841ET